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Why Is Haemonetics (HAE) Up 7% Since Last Earnings Report?

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A month has gone by since the last earnings report for Haemonetics (HAE - Free Report) . Shares have added about 7% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Haemonetics due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Haemonetics Gains on Strong Plasma Arm in Q4

Haemonetics delivered adjusted earnings per share (EPS) of 61 cents in the fourth quarter of fiscal 2019, reflecting a 41.9% year-over-year surge. The bottom line also surpassed the Zacks Consensus Estimate by 10.9%.

Moreover, on a reported basis, net income came in at 40 cents per share, representing an 81.8% jump from the year-ago period.

Further, full-year adjusted EPS came in at $2.39, mirroring a 27.8% rise from the year-ago period and also exceeding the Zacks Consensus Estimate by 2.6%.

Total Revenues

Revenues rose 6.7% year over year (up 7.8% at constant exchange rate or CER) to $249.3 million in the quarter under review. However, the top line lagged the Zacks Consensus Estimate of $250 million.

Revenues registered in fiscal 2019 were $967.6 million, up 7% from the year-ago period (same at CER).

Revenues by Product Categories

At Plasma, revenues of $128.8 million (accounting for 51.7% of total revenues) increased 15.4% year over year (up 15.9% at CER) in the reported quarter. Plasma revenue growth in North America was 17.6% including 17.6% growth in disposables.

Revenues at BloodCenter (27.8%) declined 5.6% (down 4.6% at CER) to $69.3 million.
Hospital revenues (20.5%) were up 5.4% (up 7.2% at CER) to $51.2 million.

Margins

Adjusted gross margin was 44.6%, down 10 basis points (bps) year over year.

Adjusted operating income was $42.8 million in the quarter under discussion, soaring 56.7% year over year. Meanwhile, adjusted operating margin expanded 540 bps year over year to 17.1%.

Financial Position

Haemonetics exited fiscal 2019 with cash and cash equivalents of $169.4 million compared with $154.9 million at the end of third-quarter fiscal 2019.

For the full fiscal, the company generated operating cash flow of $159.3 million compared with $220.4 million a year ago. The company also reported free cash flow (before restructuring and turnaround costs) of $70.7 million during the period, down 56.3% from the year-ago time frame.

Fiscal 2020 Guidance

Haemonetics has provided its fiscal 2020 financial guidance. The company expects full-year organic revenue growth of 6-8%. Coming to segmental revenues, on an organic basis, Plasma and Hospital revenue growth is expected in the 11-13% band each. However, Blood Center revenues are likely to decline 6-8% from the year-earlier number. The Zacks Consensus Estimate for fiscal 2020 revenues is pegged at $1.03 billion.

The company predicts 2020 adjusted EPS in the range of $2.80-$3. The consensus estimate of $2.83 is within this guided range.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates flatlined during the past month.

VGM Scores

Currently, Haemonetics has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Haemonetics has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.


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